Diesel price hike eating into PRTC revenue
The PRTC’s daily consumption of diesel was estimated at 85,000 litres before lockdown at the time when it was running a full fleet of 1,045 buses.Updated: Jun 30, 2020 14:09 IST
The constant hike in diesel prices for the past 23 days has eaten into the revenue of cash-strapped Pepsu Road Transport Corporation (PRTC).
Despite getting rebate of Rs ₹1.98 per litre than the market price from the Indian Oil Corporation (IOC), the PRTC is presently spending Rs 9-10 per litre extra on purchase of diesel to run its buses.
The diesel price recorded an estimated increase of Rs 11.14 per litre in past 23 days, including fresh increase of 13 paisa per litre on Monday.
The PRTC’s daily consumption of diesel was estimated at 85,000 litres before lockdown at the time when it was running a full fleet of 1,045 buses.
The state transport utility is already facing revenue loss due to limited bus service and low occupancy due to coronavirus-induced lockdown. The corporation faced a loss of Rs 51 crore in the first 60 days of the lockdown, with average daily shortfall Rs 85 lakh.
PRTC managing director Jaskiran Singh said the constant hike in diesel prices has put financial burden on the PRTC, which is presently running 30% (310 buses) of its total fleet of 1,045 buses.
“We are studying the clauses in a deal with the IOC over rebate on diesel. Being the bulk purchaser of the diesel, we will approach IOC and seek more discount on purchase of the fuel,” the MD said.
In January, the PRTC struck a deal with the IOC for five years (till November 30, 2024), for a rebate of ₹1.98 per litre over procurement of diesel in bulk.
“It is difficult for PRTC to bear the cost of diesel at the time when there is low occupancy of passengers on several routes across the state. The corporation is spending Rs 10 per litre additional on purchase of diesel,” the MD said.
He added that the decision on running a full fleet will be taken after taking note of expenses on diesel and seat occupancy on key routes across the state.
In 2019, the Indian Oil and PRTC had struck a similar deal related to rebate on diesel prices for five years (till 2023), but due to fluctuation in prices of diesel in the past one year, the deal was disbanded.
One of the senior officials said “In such a scenario, it is financially unviable for PRTC to ply buses. The immediate increase in bus fare and decrease in diesel prices can save PRTC finances.”
“After relaxation in transport restrictions since March 18, the PRTC daily income has dropped from Rs 1.40 crore to Rs 30 lakh,” an official said.